Abbreviations I use in the post: PDH: Previous day’s high, PDL: Previous day’s low, IB: Initial Balance or First 1 hour range, NVD: Normal variation day (one of the market profile day types), OTD: open test drive, POC: Point of control, HVN (High volume node)
Observation from previous day:
On Thursday, Nifty opened above previous day’s range with a small gap up and buyers tried to push prices up in start but failed. Them responsive sellers tried to push prices down but thee were not even able to test POC levels and buyers pushed prices back above PDH closing above PDH ending as Neutral extreme day up. Usually these types of days should follow with a good movement upside but in case it does not , we need to be cautious. The prices have been moving mostly sideways in last 4 days, so , in case we see buyers’s exhaustion, there can be a quick inventory adjustment break to test PDL before we move up. Also, clear acceptance below PDL negates this bullish view.
What can be expected now:
The price action yesterday was bullish but with a lot of struggle which might be due to expiry. So, in case it was due to expiry, we should see a good move upside. Therefore I am bullish on Nifty till prices continue to trade above PDL and will only turn bearish in case of a clear acceptance below PDL but even then i will most likely avoid short trades today.
PDH (14790) and PDL (14650) are the levels to watch out from previous day’s range. Above PDH, we can test weak high at 14890 . Below PDL , virgin POC at 14625 will form a support but below that , we can test swing low at 14460.
Trade plan for today:
Nifty is expected to open above PDH with a gap up and I will look for a long trade only in case of OTD up at PDH otherwise in case of gap, I will wait for prices to get clearly accepted above PDH and then plan long trade later. I am bullish till prices trade above PDL, so i would probably be looking for only long trades today. The bulls have been seen struggling from last few days, so we need to be very cautious if they keep struggling today also.
- Short trades are risky if prices trade above PDL.
- No long trade if prices trade below PDL.
- Banknifty formed a non-trend inside day yesterday which might be due to expiry, but in case of up move, it has to break out today and support nifty.
Please note that this is a personal view for learning , observational and education purpose and is not a trading recommendation. Trading futures carry a risk, so you should consult a financial expert before taking any risk. Also, Nifty in above statements Indicate Nifty future for current month and not Nifty index.